As the title states, if I am saving and my employer matches equals $18k or more, does that meet the intent of saving at least $18k a year for retirement? For example, hypothetically saving $3k and employer matches $15k.

I have read a lot about $18k guideline per year saving for 401k and want to understand whether that means employer and employer or does it mean $18k + match?

3 Answers
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It would be extraordinarily rare for an employer to put in $15K as a match to the $3K that you are contributing to your 401(k) plan; profit-sharing plans are different. Most employer matches are at best a 100% match for contributions up to $6K or so and zero beyond that. So, the $18K guidelines are almost certainly referring to how much you should be contributing to your 401(k) plan as a young person; older people are entitled to contribute more, especially if they didn't contribute the recommended amounts when younger (e.g. because evening beer blasts, grocery bills, car payments and insurance, kids' feeding, medical bills, education funds, etc. had more priority).

I was more asking if when you hear that you need to save at least $18k a year if that is supposed to include employer + employee or just employee. Basically, when people say that do hey mean really $18k + employee match?
– BrianSep 1 '18 at 15:11

The 2018 401(k) contribution limit is $18,500. Those over age 50 can contribute an extra $6,000 as a catch-up contribution to a traditional 401(k) or an extra $3,000 to a SIMPLE 401(k).

Each plan has its defined contribution limits. An employer may match your contributions dollar for dollar or they may contribute at a lower rate (for example, 50%). So if you earn $50k and your employer matches and can contribute up to 6% of your salary, then it's $3k if you contribute $3k. If you contribute more than that maximum, your employer cannot match your extra contribution. If the employer matches at 50% then with the above numbers, would have to contribute $6k to have your employer contribute the max of $3k.

Thanks. Understood. I was asking if the guidelines on saving $18k are meant to include employer too. Right now I am saving over $18k with employer and employee contributions. But I am not able right now to contribute the full $18k if that makes sense
– BrianSep 1 '18 at 15:12

The 2018 401(k) contribution limit is $18,500. Those over age 50 can contribute an extra $6,000 as a catch-up contribution to a traditional 401(k) or an extra $3,000 to a SIMPLE 401(k).

But this only counts the employee contribution. The total contribution limit for 2018 is $55,000 according to an article at The Motley Fool so you could (in theory) contribute you $18,500 and the company could provide matching and other contributions that total an additional $36,500 without exceeding the federal limit.

The additional $6,000 catch-up contributions still apply here as well so the total contribution could be as high as $61,000 for those over age 50.